Cathie Wood's Key Portfolio Stock Surges Over 2% Premarket: What's Going On?

Shares of streaming devices manufacturer Roku, Inc. ROKU rose in premarket trading on Friday following a positive analyst action.

What Happened: Analyst David Joyce of Seaport Research upgraded shares of Roku from Sell to Neutral. “While our tactical downgrade last month was more of a valuation call, our upgrade now is due to incremental data points that suggest there could be an upside to our estimates,” the analyst said.

As such the analyst moderately raised its estimates for Roku.

“While we are not enthusiastic about the valuation at this level (2.6x ’24E Revenue, with Adj. EBITDA turning positive in 2024), we think that barring a broader-market drawdown, shares may now be within a more reasonable trading range,” Joyce said.

See Also: Best Media Diversified Stocks

Why It’s Important: Roku shares jumped over 30% in the session following its third-quarter earnings release in early November, with investors cheering its quarterly beat and positive guidance. The company guided to fourth-quarter revenue of about $955 million, above the then-consensus estimate of $952 million.

Analysts, on average, currently model a narrower loss of 55 cents per share and revenue of $965.87 million. This compares to the year-ago’s $1.70 per share loss and $867.06 million in revenue.

Roku is among the top holdings in two of Cathie Wood-led Ark Investment Management‘s funds. The company is the third-biggest holding after Coinbase Global and Tesla in Ark’s flagship Ark Innovation ETF ARRK and the second-biggest holding in Ark Next Generation Internet ETF ARKW.

At the end of the fourth quarter, Ark held 9,528,872 Roku shares valued at $873.42 million, according to the 13F report filed with the SEC earlier this week.

In premarket trading, Roku shares rose 2.55% to $86.20, according to Benzinga Pro data.

Read Next: Cathie Wood’s Ark Invest Purchases Nearly $17M Worth Of Roku Shares, Sells Coinbase, Robinhood Stock

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